Bill Text: HI SB695 | 2012 | Regular Session | Amended

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Bill Title: Low-Income Housing Tax Credits; Grant Exchange Program; Appropriation

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2011-12-01 - Carried over to 2012 Regular Session. [SB695 Detail]

Download: Hawaii-2012-SB695-Amended.html

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STAND. COM. REP. NO. 196

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 695

       S.D. 1

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

 

Sir:

 

     Your Committee on Water, Land, and Housing, to which was referred S.B. No. 695 entitled:

 

"A BILL FOR AN ACT RELATING TO LOW-INCOME HOUSING,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Establish a program for granting no-interest loans in lieu of certain state low-income housing tax credits to developers of affordable rental housing who qualify for those tax credits; and

 

     (2)  Authorize the issuance of general obligation bonds to fund the no-interest loans.

 

     Your Committee received testimony in support of this measure from the Hawai‘i Association of REALTORS; Stanford Carr Development, LLC; Albert C. Kobayashi, Inc.; and Royal Contracting Co., Ltd.  Your Committee received testimony in opposition to this measure from the Tax Foundation of Hawaii.  Your Committee received comments on this measure from the Hawaii Housing Finance and Development Corporation, Department of Business, Economic Development, and Tourism; the Department of Taxation; and the Department of Budget and Finance.

 

     Your Committee finds that the State has a great need for affordable rental housing, as evidenced by the Hawaii Housing Policy Study, 2006 update, which projected a need of approximately 17,400 affordable rental housing units by 2015.  The State Low‑Income Housing Tax Credit Program, established pursuant to section 235-110.8, Hawaii Revised Statutes, can be a valuable financing tool to promote the development or substantial rehabilitation of affordable rental housing.  Your Committee further finds that there is little demand for state low-income housing tax credits, thereby stalling the development and rehabilitation of affordable rental housing projects due to lack of project equity.  Under these circumstances, the State Low‑Income Housing Tax Credit Program is not able to create or preserve low-income rental housing as intended.

 

     Your Committee also finds that the issuance of general obligation bonds to fund no-interest loans to developers will provide an efficient financing tool.  Additionally, forgiveness of the loan after thirty years as an affordable rental housing project will provide a great incentive for the development and substantial rehabilitation of low-income rental housing.

 

     Your Committee has amended this measure by:

 

     (1)  Inserting language to describe the purpose and intent of this measure; and

 

     (2)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Water, Land, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 695, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 695, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Water, Land, and Housing,

 

____________________________ DONOVAN M. DELA CRUZ, Chair